Flipkart now offers $850M to buy Snapdeal

Flipkart's bid of $850 million is believed to be for online marketplace Snapdeal, logistics business Vulcan Express and online order management business Unicommerce eSolutions.Biswarup Gooptu | ET Bureau | Updated: July 18, 2017, 15:08 IST

Flipkart has made a second bid for troubled online marketplace Snapdeal — estimated at about $850 million — two weeks after its initial offer was rejected.

The revised bid, which is believed to have been cleared by Flipkart’s board during the weekend, was formally communicated to the Jasper Infotech board late on Monday, according to two sources briefed on the matter.

The bid of $850 million is believed to be for online marketplace Snapdeal, logistics business Vulcan Express and online order management business Unicommerce eSolutions.

It, however, does not include FreeCharge, the digital payments platform acquired by Snapdeal in 2015 for about $400 million. However, a third source said that Flipkart’s latest offer ranges between $900 million and $950 million, but does not include Vulcan Express. This, however, could not be independently verified by ET.

Additionally, as per the terms and conditions of the revised bid, Flipkart is expected to set aside about $150 million of the $850 million as indemnity, sources told ET.

Emails sent to Snapdeal and Flipkart spokespersons did not elicit any response at the time of going to press. Goldman Sachs has been acting as the financial advisor to Flipkart for this transaction, while Credit Suisse and J. Sagar Associates are the financial and legal advisors, respectively, to Jasper Infotech.

Flipkart’s revised bid also comes about two days after Infibeam Incorporation, the country's only listed ecommerce company, denied that it had reached out to the Jasper Infotech board for a potential merger between the companies.

Ahmedabad-based Infibeam’s all-stock bid, according to two people aware of developments, was estimated to be about $1 billion (Rs 6,652.75 crore). In a statement to the stock exchanges on Friday, Infibeam called reports of its bid for Snapdeal as "purely speculative."

An offer from the BSE-listed Infibeam has the potential to give liquidity to all the stockholders of Snapdeal, a list that includes Japanese investor SoftBank, venture capital firms Kalaari Capital and Nexus Venture Partners and Chinese ecommerce behemoth Alibaba Group, among others, according to sources aware of the negotiations.

According to the sources that ET spoke to, the Jasper Infotech board will be discussing both offers on the table and is expected to arrive at a decision over the next 24-48 hours.